China Economic Quarterly International (CEQI)

Volume 5, Number 2

June 2025

 

Changes in labor share of China: A micro-level anatomy

Junsen Zhang, Qi Yu, Kang Zhou

 

Inequality of opportunity and fertility intentions

Bianjing Ma, Jiahao Wu, Yu Yu

 

Overconfident and underconcerned: Behavioral biases in redistribution attitudes

Yuyan Wang, Xu Wei, Xiao Xiao, Yi Zhou

 

Air pollution during pregnancy damages the newborns’ health: Evidence from Wuhan Birth Cohort Studies

Zhilei Shi, Xiaoqiang Zhou

 

Age discrimination causes Unemployment: Evidence from the “35-year-Old phenomenon” in China

Wenlian Lin

 

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Changes in labor share of China: A micro-level anatomy

Junsen Zhang, Qi Yu, Kang Zhou

Abstract

Using comprehensive firm-level databases, we study the micro-basis of different trends in aggregate and individual labor shares in China's manufacturing sector during 1998–2016. We find that (1) redistributing value added towards the bottom of labor share distribution causes the decline of aggregate labor share; (2) the redistribution effect is driven by firms gradually increasing market share and reducing labor share; and (3) state-owned enterprises contribute significantly to the changes in aggregate labor share. The analysis of this paper enhances the understanding of the changes in China's labor share from the perspective of dynamic change of micro-firms.

 

Inequality of opportunity and fertility intentions

Bianjing Ma, Jiahao Wu, Yu Yu

Abstract

Today's parents prioritize their children's future opportunities and well-being over the costs and benefits of child-rearing. Inequality of opportunity (IO) worsens children's developmental prospects and reduces fertility intentions. Using nationally representative data from China, we show that IO profoundly undermines parents' motivation to have children across social groups. Mechanism analyses show that residents of areas with high IO have less confidence in the future and postpone their first marriages and first children. Moreover, facing IO-induced depreciation of educational attainment, to avoid a decline in educational attainment or status, parents instead increase investment in children's education to improve their skills and quality, thereby suppressing fertility intentions. This study underscores that addressing IO is not merely a matter of equity but a demographic necessity.

 

Overconfident and underconcerned: Behavioral biases in redistribution attitudes

Yuyan Wang, Xu Wei, Xiao Xiao, Yi Zhou

Abstract

This study examines how overconfidence shapes individuals' preference for redistribution. We contend that overconfidence inflates individuals' income expectations, which reduces the perceived benefits of redistribution for these individuals and thereby weakens their preference for such policies. Using data from the 2014 China Family Panel Studies, we find that overconfident individuals are more confident in their future life and exhibit less concerns for economic inequality, healthcare, and social security issues—key proxies for preference for redistribution. These results are more pronounced among less wealthy individuals. In addition, our results remain unchanged after controlling for individuals' trust in government and risk preference. These findings highlight the role of biased belief in shaping individuals’ attitude toward redistribution, offering new insights for discussions on redistributive policies.

 

Air pollution during pregnancy damages the newborns’ health: Evidence from Wuhan Birth Cohort Studies

Zhilei Shi, Xiaoqiang Zhou

Abstract

We examine the causal impact of air pollution during pregnancy on the early health of newborns using daily data from environmental monitoring stations in Wuhan and data from the Wuhan Birth Cohort Studies (WBCS). Results show that air pollution during pregnancy significantly damages the early health of newborns, and this effect intensifies continuously with the increase in air pollution levels. Compared with late pregnancy, air pollution has a greater impact on the newborn in early and mid-pregnancy. The air pollution during pregnancy has a greater impact on children born to women with low socioeconomic status and advanced age. Mechanism analysis suggests that air pollution increases the probability of perinatal complications and reduces the number of prenatal visits.

 

Age discrimination causes Unemployment: Evidence from the “35-year-Old phenomenon” in China

Wenlian Lin

Abstract

Age discrimination in the labor market is a global issue, and in China, it becomes a pressing concern, particularly in the context of so-called “35-year-old crisis.” Departing from the literature that largely relies on resume experiments to identify age discrimination during hiring, I focus on China's labor market and use the 2015 census data to construct a regression discontinuity design for identifying age discrimination and its causal impact on unemployment. The results show that dismissal rates rise significantly immediately after workers exceed the age of 35, even after controlling for productivity-related factors. This rise is driven by negative age stereotypes held by employers and anchoring biases in their employment decisions, but with notable variations across regions, individuals, and time periods.